Ford first to ink a deal with autoworkers — but why?

The CAW reached a four-year tentative deal with Ford on Monday afternoon, narrowly avoiding a midnight strike deadline. The union’s top brass announced Ford as its target negotiating partner over the weekend, identifying it as the Detroit Three company most willing to play ball.

“Ford has been most receptive to the concept of the extended new hire grow-in and appears to recognize that the union will not accept a permanent two-tier workforce,” the CAW said in a statement Monday.

“Neither General Motors nor Chrysler seemed to be as willing to reach a deal – both have significant concession demands on the union, even to this day.”

But there is good reason to question Ford’s leadership role in the talks, according to Tony Faria, director of the Office of Automotive Research at the University of Windsor’s Odette School of Business. The company may be more intent on harming its competitors than helping its workers.

Ford is in the best financial position of the Big Three, and has the smallest footprint in Canada — less than five per cent of its global auto assembly is in the country, compared to about 10 per cent of GM’s and 25 per cent of Chrysler’s. It can afford a deal that may damage its competitors — and by extension the CAW — down the road.

“Ford has the least to lose from an unfavorable contract with the CAW,” Faria said. “A deal that’s acceptable to Ford may not be acceptable in any way, shape or form to GM or Chrysler.”

Faria said he noticed this same pattern during the 2008 negotiations, when Ford emerged as the lead negotiator and inked a deal that agreed to many CAW demands but was “very, very bad” for the car companies.

He suggested Ford executives are attempting to “throw the burden” on their two competitors, who will be dragged down by the expensive deal.

“The only thing I could figure afterwards was Ford was saying, well, we don’t like it, but it’s going to hurt GM and Chrysler a lot worse than it’s going to hurt us.”

This could spell trouble for Ontario’s auto industry in the long run, according to University of Western Ontario economist Mike Moffatt. The union might win the battle in 2012 by securing a favourable deal with Ford. But it might end up losing the war, as all three car companies move operations to take advantage of lower labour costs in the U.S. and Mexico.

“The CAW has to walk a really fine line here,” Moffatt said. “We’re slowly going to see an erosion of the industry out of Canada. They need to find a middle ground for their own reasons.”

Queen’s University labour relations expert George Smith isn’t so sure Ford is out to get Chrysler and GM. He said the company has a good working relationship with the CAW, and noted they have been leaders in other respects, such as the modern bargaining tactic of trading concessions for investment promises.

“They have a significant investment in production here. They have a brand. Unlike perhaps the NHL, they actually care about their customers a little bit here.”

Even though Ford and the CAW have reached a deal, it will not necessarily buy labour peace. The union plans to ask Chrysler and GM to accept the deal as a pattern settlement, but it might not be as easy as usual, according to Moffatt. Chrysler has a taken a hard line in 2012 and may refuse to fall in line with Ford.

“They may very well push for further concessions. It’s not out of the realm of possibility that the CAW may be either on strike or locked out of just Chrysler while having a deal with the other two,” Moffatt said.